German giant eyes up Aventis Crop Science
BAYER is confident of vying for top spot in the agrochemicals sector with market leader Syngenta if a proposed bid for Aventis Crop Science gets the green light.
The German conglomerate is expected to pay about k6bn ($5.04bn) for the crop protection division of the life sciences company, which reportedly turned over k4bn ($3.4bn) in 2000.
Investors claim the deal makes sense for all parties, but a number of analysts believe that Bayer might be over-valuing its potential acquisition because of the single digit growth predictions for the farm chemicals market.
The move would, however, strengthen the companys position in herbicides and plant biotechnology and boost its dominance in the insecticides market.
But any excessive grip on one sector would attract the scrutiny of competition regulators and there is speculation that the insecticides division could be hived off to BASF to gain approval for the deal.
It is expected that discussions will continue for a further two weeks, but any decision will have to meet with the approval of German pharmaceuticals group Schering, which holds a 24% stake in Aventis Crop Science. *